Summary

German consumer confidence fell to a record-low of 27.4 in July according to a popular measure from the GfK Group, down from 26.2 the month before. Notably, the reading actually falls below the water mark left by the immediate aftermath of the initial wave of COVID-19 global shutdowns. Some of these COVID-related shocks continue to reverberate in the present context; for example, in China’s ongoing zero-COVID policy and ongoing disruptions to global supply chains. However, they have subsequently been joined by new geopolitical phenomenon, which together are thwarting the prospect of a smooth return to normalcy for Europe’s largest economy.